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Thursday, February 17, 2011

BP Responds to GCCF Claims Methodology

Today’s New York Times reports that BP has weighed in on the proposed claim and compensation methodology set forth by the Gulf Coast Claims Facility. The proposal outlines the steps and methods GCCF will use to determine how much to compensate the people who were harmed by BP’s Deepwater Horizon oil spill.

The oil giant is arguing that if anything, Mr. Feinberg’s proposed settlements are too generous. The planned payments far exceed the extent of likely future damages because they overstate the potential for future losses, the company insists in a strongly worded, 25-page document that was posted on the fund’s Web site Thursday morning.

Basing its estimates on much of the same data Mr. Feinberg used, the company concluded that there was “no credible support for adopting an artificially high future loss factor based purely on the inherent degree of uncertainty in predicting the future and on the mere possibility that future harm might occur.”

BP has pledged a fund of $20 billion to compensate the victims of their oil spill. Feinberg has famously estimated that the GCCF will pay out only $10 billion in claims. Now it seems that BP is putting pressure on Feinberg and the GCCF to pay out as little as possible, disregarding arguments for a more cautious, fair, and transparent approach.

AFJ applauds GCCF for taking the step of releasing its methodology to promote greater transparency in the claims process. We take this opportunity to suggest a number of improvements that should be made to better protect claimants’ rights. Namely, because the projection of when the Gulf will fully recover is inherently speculative, the methodology should include a mechanism to address harms greater than those forecasted in the projection relied upon by GCCF. Moreover, the methodology should more clearly inform claimants of the documentation requirements, causation standard, and eligibility criteria GCCF will use in administering claims. Finally, going forward there needs to be more transparency in the way the methodology is applied to individual claims.

AFJ’s award-winning short film, Crude Justice, explores many of the legal issues Gulf Coast victims face as they fight for justice in a system that often seems dominated by corporate interests. You can now watch Crude Justice on YouTube.